To listen to the national news media, you would have thought that the announcement by Federal Reserve Chairman Alan Greenspan concerning Social Security changes is a surprise. Greenspan on Wednesday hit the hot-button topic of changing Social Security benefits and said the system was headed toward financial ruin without some benefit changes. But anyone who has paid even fleeting attention should know that this move was inevitable. The national talking heads must have been sleeping.
I know as much about Social Security as the next guy - which is very little. I know that money is taken from my paycheck and those funds - in theory - will help to fund my needs when my working days are over. But more importantly, I know that 77 million baby boomers, including myself, will soon be entering retirement age and the amount of money paid into the system will not support the explosion of new enrollees. So something has to change.
A hands-off policy toward Social Security is the unwritten rule of politics. The elderly vote and the politicians know they vote. And to listen to some of the older population, any changes in Social Security benefits is tantamount to death. Any politician who advocates a reduction in benefits is surely to irk a sizable voting bloc and that spells political suicide.
I see three changes as needed. None is overly popular however. First, there should be a gradual increase in the retirement age to be eligible for full Social Security benefits. Second, the government should impose means testing for Social Security benefits which means that those wealthy Americans who obviously don't require Social Security benefits for their retirement years would be ineligible. And finally, the SSI program within Social Security must be examined and changed.
The SSI program was originally designed for the disabled and the blind, as I understand it. But this program has apparently become the catch-all of dependency programs and now is abused and misused to a level that would shock the public. And that brings up another matter. Much of the problem with Social Security is not so much the changing numbers and the retirement boom, it's the way the program has been molded by Washington into an extension of the welfare state. Low-income children with ADD, for example, are increasingly SSI recipients, I'm told. I'm not at all certain how the retirement program evolved into another Washington give-away.
The theory is that your retirement funds are prepaid during your working years. That way, you have some level of benefits for those golden years. But SSI turns that concept on its head. And it's clearly beyond the bounds of the original intent of this massive program.
Emerson, Bond, Talent and all others listen carefully. If you want to examine Social Security, start with the SSI program. You might find the answer right in front of your face.